EY has halted plans to spin off its audit and consulting businesses after months of disagreements between the company’s global management and its US partners, the Financial Times revealed on Tuesday.
In an internal memo signed by the 18-member global executive committee of EY, one of the world’s Big Four consulting firms, the firm said it was freezing a plan that had been dubbed Project Everest, according to the FT.
“The global executive team remains committed to moving towards creating two world-class organisations that promote audit quality, independence and client choice,” the internal memo said.
“However, we have been informed that the US executive committee has decided not to move forward with the design of Project Everest. Given the firm’s strategic importance in the US to the Everest Project, we have halted work on the project,” adds the text published by the British newspaper.
EY operates a global network of partner firms, and any spin-off would have to be approved by the management of each country in which it operates.
EY’s global CEO, Carmine Di Sibio, has defended the split as a way for the multinational to move away from being subject to rules that make it difficult for consultancies to offer audit services to the same clients.
“We always knew that Project Everest was a challenging journey. We will take action based on what we have learned from the work we have done over the past year,” the firm’s global management stressed in a statement released today.